Statistical Analysis Stack Exchange
Statistical Analysis Stack Exchange

Questions tagged [elasticity]

In economics, a measure of the sensitivity or responsiveness of a variable corresponding to a change in another variable. Common applications in empirical research include price or income elasticity of demand. For example, what is the percent change in quantity demanded for gasoline when price is increased by 1%?

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xgboost demand model with a smooth effect for the price variable

Question The question is: how to smooth out kinks in individual demand curves in a GBDT model without underfitting on the price variable? Background We have some GBDTs demand models already in place (with monotonic constraints that ensure…
mirekphd
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Name for "probability density elasticity" property?

For standard normal Z, the change in probability density associated with equally sized changes in z is obviously greater for values of z that are further away from the mean/mode. For example, if z=0, then $\phi(z)- \phi(z+0.1)\approx 0.002$.…
BGTP33
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When using OLS on $\ln(y) = \beta_1 \ln(x) + \epsilon$, is $\beta_1$ the elasticity of $E[y\vert x]$, or the $y$ in the data (or both)?

Specifically, suppose we are estimating $$ \ln(y)=\beta_1\ln(x) + \epsilon $$ I understand that $\beta_1 = \frac{\partial \ln(y)}{\partial \ln(x)}$ which is the elasticity of $y$ with respect to $x$ However I am confused since OLS estimates the…
user106860
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price elasticity and time series modelling

Formulas like this taken from here: Log_Demand_A = constant + b1*log_Price_A + b2*log_Price_B + b3*Promo_1 + b4*Promo_2 + b5*log_Price_A*Promo_1 + b6*log_Price_A*Promo_2 can be easily fitted with common linear regression algorithms in R or SAS. The…
cs0815
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Price Elasticity Calculation

I have a question concerning price elasticity calculation. Let us say that I have 26 points in time where for each one I have recorderd price $P_t$ and demand $D_t$ for a product. One way to calculate elasticities is to take two consecutive points…
Andreas Zaras
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constant model elasticity demand

I need to be corrected if i have something wrong : the elasticity of the demand is calculated : dq/dp if q is the quantity and p the price so to calculate it i take two prices p1 and p2, if i have an f function of the demand over the price i will…
user3379546
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Interpreting coefficients in log-log model with dummy for elasticity

I'm running an analysis of two products, X and Y, and I'm particularly interested in understanding the elasticities. However, I'm struggling to interpret the results. I'm using a log-log model, and in the first run I set quantity of product X (oz_X)…
Cass
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Modelling dynamic price elasticity with bsts

I have approximately 2000 daily data which contains total daily sales and median price of sales for a particular product. I read the paper but the level of bayseian math is too high for me but from my past experience with price elasticity, I think…
thulungair
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How to interpret interaction in Log Log models

I have the following model, and I am not sure how to interpret the elasticity of the interaction term (log-log coefficients): Log(member) = 3.61 + 0.52 Log(Poor) - 0.26 Log(Sick) + 0.04 (Log(poor) * Log(sick))
Altijani Hussin
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In R, How can I calculate the elasticity of Y with respect to X, when Y is binary?

I have a dataset that I am doing in R and I need to calculate elasticities in it. To simplify my model, I have Y = XB + u, and I need to find the elasticity of Y with respect to X. My investigation led me to the margins package in R, which seems to…
igiari21
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Are regression estimates still reliable despite heteroscedasticity and non-normality

I am performing a simple linear regression with the lm() function to make statements about the association between the two variables. But I am not sure if my regression estimates and the t-test are correct due to the violations of assumptions…
Kaizen502
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own and cross elasticity for many products

This publication uses this formula to fit a model to predict the demand of a product A: Log_Demand_A = constant + b1*log_Price_A + b2*log_Price_B + b3*Promo_1 + b4*Promo_2 + b5*log_Price_A*Promo_1 + b6*log_Price_A*Promo_2 I have 2 questions. What…
cs0815
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Interpret eydx, eyex in margins, Stata

Suppose the regression is y=beta_0+beta_1*x + epsilon. I obtain the eydx=.295 by magins eydx(x) command. What does Stata really do? Does Stata actually regress logy on x? If so, can I interpret the result as one unit increase in x leads to 0.295…
Ding Li
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Explanation for negative cross-price elasticities if the two alternatives cannot be complements

I would like some help in interpreting some odd cross-price elasticities that I got from my model. I estimated the following multinomial probit model and calculated the elasticities post-estimation: $Alt_{i}=\beta_0 +…
Marquis de Carabas
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Price Elasticity at customer level

Has anyone worked on Price Elasticity model at customer level? In Insurance Industry, insurance policies from a insurer that have been given a renewal offer in the period of 2 years are taken. Target Variable: (Binary) whether a customer renew an…
Riya
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